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Supply Chain Management Competencies: Broad vs. Deep?

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The following also appears as a published guest commentary on the Supply Chain Expert Community web site.

Earlier this month, the Wall Street Journal’s Theory and Practice series published an article, The New GE Way: Go Deep, Not Wide.  (paid subscription required or free metered view) For many of us who are familiar with General Electric’s previous tenets of management education, this article notes that the company that once prided itself on a curriculum of grooming  broad industry and functional generalists has instead shifted its management training focus in favor of deeper expertise. The WSJ points out that like all companies, GE requires both horizontal and vertical traits in its leaders, but the balance has tipped toward deeper expertise. Instead of purposely relocating senior leaders often to expose them to more of the company’s diverse businesses, GE now assigns these future leaders with longer assignments to develop a deeper understanding of products and the specific customer needs within an industry segment.

The reasons for this shift are those that many in our community have likely observed.  The pace of global business requires a much more intimate knowledge of the aspects of customer needs, product development, supply chain tradeoffs and go-to-market strategies. In the article, Anders Wold, head of GE’s ultrasound business is quoted: “Customers tell us exactly what they want. If you are very generic, if you don’t have the domain understanding, you will develop products that will be average and not successful.” GE’s aviation business unit, one of the fastest growing businesses, is headed by David Joyce who has devoted his entire career to aviation engine platforms.  Previous leaders of this GE business unit came from outside of aviation.

In our view, this trend is also a reflection on accountability, staying in a leadership position for the time to make longer-term initiatives successful and avoiding the constant “parachuting” into and out of programs without a consistency in leadership and follow-through to initially targeted results. Broad initiatives directed at implementing a company-wide S&OP process, implementing advanced technology or shepherding a multi-year supply chain transformation effort can often lose momentum or perspective from frequent changes in leadership.

The point of this commentary is for our supply chain community to reflect on the functional and leadership skills that are required in this new era of dynamic business change, globally extended supply chains and risk exposures.  Supply Chain Matters offers a point-of-view that required skills should reflect broad functional supply chain skills and deep business and program management skills.

Regarding functional knowledge, not everyone can effectively contribute within this new and faster clock speed of business without broader supply chain functional knowledge. That is why current certification programs offered by either APICS or CSCMP test on broad based functional knowledge in areas such as customer relationship management, procurement, planning, transportation and logistics, among other areas.  The goal of certification is to reflect a fundamental baseline knowledge of the processes involved in the supply chain, and we would add, the newest price of admission into the function.  Beyond acquiring certification are years of actual experience working within and across many supply chain functional areas in implementing business and functional program needs.  Thus, broad supply chain horizontal skills and practical knowledge remain extremely pertinent to success.

Conversely, at the management level, we submit that deep understanding of the business, effective communication to senior management, coupled with demonstrated leadership at implementing needed strategic, tactical and operational change are clearly new stakes for global supply chain leadership.

It may be no secret that some current managers within individual functional domains have risen to leadership roles because of their deeper functional and tactical leadership skills vs. broader understanding of either supply chain multi-functional requirements or needs to directly integrate supply chain business process and information technology initiatives with required longer-term business outcomes.  This is often where initiatives for ‘taking cost out of the supply chain’ conflict with ‘providing enhanced services’ for innovative new products.

Tomorrow’s supply chains require leaders who can articulate how supply chain capabilities impact a required business outcome or desired metric of performance.  They are leaders who build their resume on facilitating timely strategic and tactical change vs. multiple assignments implementing short-term objectives.

What about your supply chain organization?

Are functional and management training or mentoring programs addressing the unique needs of broad supply chain functional and deeper business and management skill knowledge?

What are other thoughts to this important area of management skills development?

Bob Ferrari

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